Real estate is our world.

New York is home to the Underground, London has The Tube, Paris has the Metro, and soon Melbourne will boast the Melbourne Metro Rail.

This week the Andrews government confirmed plans for the largest public infrastructure project in Victoria’s history – the Melbourne Metro Rail – to bring our city up-to-speed with the world’s best.

The multi-billion dollar plan includes five new train stations, two nine-kilometre tunnels and will carry 20,000 extra passengers during peak hour.

The extra services will be welcomed as our city’s population is forecast to increase to seven million by 2013. Melbourne is growing fast – we’re seeing apartments erected in the city and new housing estates emerging in the fringes each day. Yet the increased volume of people is playing havoc on our roads where traffic congestion woes are worsening.

The big question is whether Melbournians will opt for the train over their beloved cars.

For instance, a recent Liveability Index conducted by The Age showed many of Melbourne’s suburbs rich in public transport are in fact home to some of the worst traffic conditions, because many people still prefer to travel by car.

Time will tell if the Melbourne Metro Rail will be embraced by Melbournians over their personal vehicles – however it is no doubt a step in the right direction towards improving facilities to manage growth.

Victoria is seeing a surge in first home buyer activity, with the latest ABS figures showing the state is leading the charge when it comes to lending approvals.

The number of loans granted to Victorian first-timers was up 5.7 percent in the first nine months of 2015 compared to the same period last year – substantially greater than Queensland which only grew two percent, and the other states where loans dropped.

This increase is largely due to the availability of affordable land in the city’s fringe areas where there is now improved infrastructure and public transport. For instance, house and land packages in estates in the outer rings have gone gangbusters. Our Melton and Caroline Springs offices have seen a substantial increase in young buyers seeking land this year too.

Low interest rates and the directives from APRA have also played a hand. With investor lending tightening and less competition for apartments and family homes, first home buyers now have a foothold in both the inner city and outer suburban markets. Lower interest rates for owner-occupiers also means it’s more affordable for youngsters to buy rather than to rent.

Looking into 2016, with interest rates remaining low and the market moderating, the signs are positive for those wishing to purchase their first home.

With summer around the corner, it seems seaside properties are the flavour of the month, with clearance rates in the Mornington Peninsula hovering close to 80 percent (CoreLogic RP Data).

The popularity of the Peninsula has lifted tremendously thanks to the introduction of the Peninsula Link, making it a mere hour’s drive from Melbourne.

In fact, house prices in Sorrento and Blairgowrie, right through to McCrae, St Andrews Beach and Rosebud West have all risen between 10 to 16 percent in the September quarter alone.

There’s no doubt demand is strong with our Rosebud office recently selling 5-7 Coburn Ave in McCrae for $1million over reserve – it was also the first time this property was on the market for 120 years.

With a majority of our Buyers in the area hailing from Melbourne, it’s undeniable that the direct link to the city, the beaches, views, walking trails, wineries and fresh produce is attracting holiday makers in droves.

For those after a holiday home, there’s currently plenty of stock on the market. Look for properties either offering a sea view or within walking distance to the beach – these will hold their value in the long term.

Also be prepared to bid at Auction, as close to 70 percent of Peninsula homes are now sold under the hammer instead of Private Sale.

A new report from the Australian Population Institute suggests that the supply of family homes in middle Melbourne is dwindling, as a result of the baby boomer generation choosing to stay in their homes instead of downsizing. The data found that almost 60 percent of freestanding houses in Melbourne’s middle suburbs are occupied by Australians over the age of 50 who are unlikely to move until they are 75 or older.

The report also stated that this meant there is currently inadequate housing for young families after large homes in the middle ring areas. However, hockingstuart’s own data shows a somewhat different trend – this weekend, almost 50 percent of our homes going under the hammer are in the middle circle and have at least two bedrooms.

There’s also plenty of housing options for families just outside the middle suburbs. For instance, our Melton and Ringwood offices are booming, simply because the quality of infrastructure, transport and schooling have improved in these areas, and there’s plenty of large houses with yards available. On the flip side, some families are also embracing apartment living and are forgoing the backyard for an inner-city lifestyle, where parks and facilities are within walking distance.

Remember, there is not a ‘one size fits all’ approach to housing families. Each Australian household is unique and is drawn to the living options that best meet their needs.

For the first time in three years, Westpac was the first major bank to unexpectedly raise its mortgage rate for owner-occupiers by 0.2 percent.

The nation’s second largest mortgage lender did this to ensure there’s enough capital in reserve in the unlikely chance of a recession. And economists believe Westpac’s move could force the RBA to cut the cash rate once more this year for the very same reason.

Already this year, regulatory changes have reined in demand from the investment sector. Pundits are also wary that the rate rise could cool interest from the owner-occupier market.

However, it’s important to remember that the motives of home owners and investors are vastly different.

The goal for investors is to grow capital – they will chop and change between asset classes depending on where they will receive the best returns.

Whereas, home owners are looking for a roof over their head. There’s no substitute for a basic need like shelter, therefore it’s unlikely that owner-occupier demand will dramatically change.

Sellers should also feel assured that a 0.2 percent increase in interest rates is unlikely to drive down demand, and if you’re house hunting, remember that interest rates are still at record lows.

The latest CoreLogic Pain & Gain report highlights that the majority of Australian homes resold over the June quarter made a profit – while a third of vendors in fact doubled their original purchase price.

The report, which analyses the percentage of sellers who made a profit compared to a loss across metro and regional markets also indicated the length of time home-owners should hold onto their dwelling.

Homes that resold for a loss were owned for an average of 5.3 years, while vendors who made a profit typically owned their property for 9.9 years. Vendors who doubled their money held their property for even longer, an average of 16.4 years.

No surprise that Sydney and Melbourne were the top two markets with the highest proportion of profit making Vendors. Another bright star was regional Victoria, which came in fourth place with 91.4 percent of Vendors making a profit. This is tremendous, considering other regional markets were among the worst performers in Australia. According to the report, this comes down to the fact that regional areas linked to tourism and lifestyle – such as Daylesford, Mornington Peninsula and Torquay – often perform better.

Melbourne’s burning hot property market is beginning to taper down with Auction rates levelling out and regulatory changes reining in Investor demand. But it’s important to remember we’re far from seeing a downturn – the market is simply moderating.

Property developer Propell predicts Melbourne’s real estate will hit a modest growth of five percent this financial year – a solid forecast, considering annual growth over the past five years has averaged 3.5 percent per year.

Economists also believe interest rates will be cut again before Christmas. Combined with the low Australian dollar making our property market attractive for foreigner Investors, demand for houses is unlikely to wan.

In fact, hockingstuart has over 400 Auctions scheduled for October on the back of a positive September with an average Auction clearance rate of 74 percent, so there’s plenty of stock for Buyers wanting to lock down a new home before the year’s end.

Overall, both Buyers and Sellers alike should embrace the levelling out of the market as it will ensure the sustainability of real estate as an appreciating asset over the long term.